Slide 1: SEEK Limited FY2020 Half Year Results Presentation ASX cover letter
25 February 2020 ASX Market Announcements Office Dear Sir/Madam SEEK Limited (SEEK) - FY2020 Half Year Results Presentation In accordance with the Listing Rules, SEEK releases its FY2020 Half Year Results Presentation to the market. This document was authorised for release by SEEK’s Board of Directo
Slide 2: H1 20 Results Presentation
SEEK Limited H1 20 Results Presentation 6 months to 31 December 2019
Slide 3: SEEK is fulfilling its purpose on a large scale
SEEK is fulfilling its purpose on a large scale… Market leading businesses with large Strong assets and capabilities to leverage Entrepreneurial mindset with a track addressable markets into our growth strategy record of long-term value creation Asia Pacific & Americas (AP&A) Population exposure Can
Slide 4: Pursuing a A$5b revenue opportunity by FY25
…as we aggressively pursue a A$5b revenue opportunity by FY25. Asia Pacific & Americas (AP&A) SEEK Investments M&A and Entrepreneurial ANZ Activities Scaling up existing Online Education Aligning Price to Bringing SEEK Asia Online Employment partners & signing Value to ANZ baseline new partners Key
Slide 5: Tangible progress in all strategic priorities during H1 20
We made tangible progress in all strategic priorities during H1 20… Asia Pacific & Americas (AP&A) SEEK Investments M&A and Entrepreneurial ANZ Activities Aligning Price to Value Lifting the baseline Online Employment Scaling up partners • Deployed A$105M • New pricing & contract • Operating model e
Slide 6: Confident in ability to unlock significant financial benefits over time
…and are confident in our ability to unlock significant financial benefits over time. • Benefits of our investment process are first seen in our operating metrics followed by our financial results o Seeing positive momentum across key operating metrics o History has shown that translation to signifi
Slide 7: Long-term investment approach has created significant shareholder value
SEEK’s approach to long-term investment has created significant shareholder value c5x1 TSR vs ASX 200 since IPO despite the economic cycle and aggressive competition 3 Product & Tech evolution 1,289.7% M&A led growth 2 (Int’l & Education) 1 ANZ led growth 240.3% Apr-2005 Oct-2007 Mar-2010 Sep-2012 M
Slide 8: Group Financial Performance
Group Financial Performance
Slide 9: Resilient result in subdued macro conditions and continued investment
Resilient result in the context of subdued macro economic conditions and continued investment H1 20 Financials (A$m)1 Results & Insights Constant Growth Currency H1 20 revenue growth of 16% (all organic) Revenue H1 20 H1 19 % % • AP&A: resilient result despite weak macro conditions SEEK ANZ 224.4 22
Slide 10: Strong cash flows deployed into high growth opportunities
SEEK generates strong cash flows which have been deployed into high growth opportunities… Strong operating ..have been deployed into high cash flows… returning capex… ..and high growth M&A Operating cash flows A$m Product & Tech capex A$m Value created through M&A c2.5x $250m $242m $232m $57m $203m
Slide 11: Evolved capital structure to support growth strategy
…and we have evolved our capital structure to support our growth strategy. SEEK’s dividend payout reflects our investment …and we have improved our capital structure to strategy… support our growth aspirations • Dividend policy • New & diversified capital structure to support growth o As communicate
Slide 12: Asia Pacific & Americas (AP&A)
Asia Pacific & Americas (AP&A)
Slide 13: AP&A leveraging ANZ's capability across a larger opportunity set
AP&A is leveraging ANZ’s capability and product & tech initiatives across a much larger opportunity set SEEK has a track record of innovation and revenue …and is now taking ANZ’s success to a much growth in ANZ… larger market opportunity. ANZ Revenue (A$m) Leading product & 3 tech business Populatio
Slide 14: AP&A investing in long term competitiveness despite weaker volumes
AP&A is investing in long term competitiveness despite weaker volumes • Economic and geopolitical challenges weighed on job ad volumes o Ad volumes weak in ANZ, but some positive signs from SMEs at the end of H1 20 o Material volume declines in Hong Kong due to economic impacts of unrest o Growth sl
Slide 15: ANZ revenue and EBITDA flat due to economic conditions
ANZ revenue and EBITDA flat due to economic conditions Financials Strong growth in depth revenue1 A$m 61.4 A$m Growth c2.4x growth in Depth H1 20 H1 19 % 52.6 Revenue 224.4 222.0 1% EBITDA 134.2 134.2 0% 37.7 EBITDA (%) 60% 60% 29.3 22.2 16.5 17.6 17.3 18.0 15.5 Revenue growth of 1% attributable to:
Slide 16: SEEK ANZ continues to lead the market across key metrics
SEEK ANZ continues to lead the market across key metrics despite strong competition Market leadership in key operating metrics… …translates into a large lead in placements Share of AU Placements (%) Largest candidate audience As at Jan-20 37.2% Market leader with c35m+ monthly visits • c70% of total
Slide 17: SEEK ANZ progress across two key growth drivers
SEEK ANZ is making progress across its two key growth drivers Scale and depth of candidate and hirer relationships underpin two growth opportunities: Aligning price to value Product Set Expansion Move to a more equitable and efficient marketplace Utilise ANZ’s strategic assets (unique data, strong b
Slide 18: Revenue growth in SEEK Asia was flat
Revenue growth in SEEK Asia was flat in a lower growth economic environment Financials Growth in depth revenue A$m Constant c85% growth in Depth A$m Growth Currency SEEK Reported H1 20 H1 19 % % 15.7 Revenue 91.3 84.7 8% 0% EBITDA 45.6 44.6 2% (5%) 12.9 EBITDA (%) 50% 53% 9.5 8.5 Financial result re
Slide 19: LatAm: Results in line with expectations
LatAm: Results in line with expectations Brasil Online Key Insights BRLm Growth • Brasil Online and OCC continue to hold market leading Pro-Forma H1 20 H1 19 % positions in large labour markets Revenue 80.7 85.9 (6%) o Combined population of c335m EBITDA 9.4 14.9 (37%) EBITDA (%) 12% 17% o Ranked 9t
Slide 20: SEEK Investments
SEEK Investments
Slide 21: M&A and entrepreneurial ventures are key part of strategy
M&A and entrepreneurial ventures are a key part of SEEK’s strategy… Leveraging SEEK’s strategic advantages to pursue new growth opportunities across the broader Human Capital Market Our approach SEEK’s unique strategic Focused on long-term returns advantages • Investing in purpose aligned • Deep exp
Slide 22: Proven track record of generating strong returns over time
…and we have a proven track record of generating strong returns over time. Returns and duration held by asset Key insights Capital Gain IRR Years held Largest gains made over a medium to long-term horizon (x) (%) (#) • Zhaopin and OES have been held for 8+ years and are generating significant valuat
Slide 23: Zhaopin performed well in a challenging macro environment
Zhaopin performed well in a challenging macro environment… Financials Results & Insights RMBm Growth Revenue resilient in light of weak operating conditions Pro-Forma H1 20 H1 19 % • Total revenue grew by 27% Online Revenue (100%) 1,091.4 1,139.5 (4%) • Online revenue decline of -4% due to lower uni
Slide 24: Zhaopin focused on building online market share
…remains focused on building online market share… Strong hirer lead yet remain significantly Hold the lead on key candidate Significant long-term opportunity to align under-penetrated metrics but more work to be done price to value Strong Hirer lead1 Solid Candidate lead Significant Online ARPU1 Opp
Slide 25: Penetrating large adjacent market opportunities
…and further penetrating large adjacent market opportunities. Adjacent Services market opportunity (cA$120b) is 6x larger than Online (cA$20b) • Online offerings to remain Zhaopin’s core focus, however significant opportunity exists from leveraging hirer & candidate relationships and data to grow ad
Slide 26: OES investing to scale multiple partnerships
OES is investing to scale multiple partnerships and expand its offerings Financials Growth strategy & Outlook A$m Growth Pro-Forma H1 20 H1 19 % Revenue (100%) 65.1 61.5 6% EBITDA (100%) 18.6 20.0 (7%) EBITDA (%) 29% 33% Existing Partners New Partners Short courses, micro-credentials Results & Insig
Slide 27: Portfolio of high growth businesses leveraged to structural trends
SEEK Investments owns a portfolio of high growth businesses leveraged to key structural trends Online Education HR SaaS Contingent Labour Demand driven by structural Cloud based solutions are solving Tech solutions delivering Key structural large HR problems more significant efficiencies in large, c
Slide 28: Online education businesses disrupting traditional education delivery
Our portfolio of online education businesses are disrupting traditional modes of education delivery Online Program Management MOOCs & Online Learning Disruptive • Helping universities bring their course content online • Providing learners with access to a large scale of career- logic • Developing ri
Slide 29: HR SaaS businesses have opportunity to be market leaders
Our high quality HR SaaS businesses have the opportunity to be strong market leaders Investment thesis Strong growth in portfolio metrics and financial results Disruptive • GO1 is solving significant hirer pain points which are Portfolio logic not addressed by legacy learning & education solutions i
Slide 30: Contingent Labour platforms growing strongly in large revenue pools
Our Contingent Labour platforms are growing strongly and operating in large revenue pools Investment thesis Strong growth in portfolio metrics and financial results Disruptive • Tech solutions driving overall effectiveness by logic helping hirers find relevant talent at a faster rate • Net Revenue g
Slide 31: Outlook
Outlook
Slide 32: Original FY20 Guidance (pre impact of Coronavirus)
Original FY20 Guidance (pre impact of Coronavirus) Based on performance through the first seven months of FY20, SEEK was on track to achieve its original Revenue and EBITDA guidance1 despite several negative short-term external events: • US-China Trade Tensions: Still feeling residual impact across
Slide 33: Coronavirus impacts to FY20 guidance
Coronavirus impacts to FY20 guidance • Outside of China and Hong Kong, the direct impact of Coronavirus has not been material and performance to date is broadly aligned with our original guidance • As a result, excluding Zhaopin (China), SEEK does not expect any material change to its FY20 outlook1
Slide 34: Near-term likely challenging but focused on long-term
Near-term is likely to remain challenging but we are focused on running the business for the long-term • Our near-term results are being impacted by Coronavirus and macro conditions • Despite this, we will retain an investment bias where we prioritise long term value creation over short term earning
Slide 35: Appendices
Appendices
Slide 36: SEEK Group: H1 20 Segment Results
SEEK Group: H1 20 Segment Results H1 20 Segment Results (from Note 1, p16 of SEEK’s Half year report 2020) Segment changes; No changes to total Revenue, EBITDA or NPAT • Minor changes have been made to SEEK’s operating segments for H1 20 to align with Executive responsibilities and analysis of resul
Slide 37: H1 19 & FY19 Operating Segment changes
SEEK Group: H1 19 & FY19 Operating Segment changes (Revenue & EBITDA) H1 19 FY19 A$m H1 19 Segment H1 19 A$m FY19 Segment FY19 Reported changes Restated Reported changes Restated Revenue Revenue SEEK ANZ 221.7 0.3 222.0 SEEK ANZ 437.6 2.4 440.0 SEEK Asia 84.7 84.7 SEEK Asia 176.6 176.6 Brasil Online
Slide 38: SEEK Group: AASB 16 Leases
SEEK Group: AASB 16 Leases H1 19 Operating lease costs - by Business FY19 Operating lease costs - by Business Operating lease costs by business provided above for directional/illustrative purposes only (Note this is not an AASB 16 adjusted position) Key insights • New leasing standard (AASB 16) effe
Slide 39: Robust and diversified balance sheet
Robust and diversified balance sheet Net debt breakdown Key insights • Robust balance sheet with reported net debt of A$895m (Jun-19: A$757m) • Increase in Group net debt of A$138m (vs Jun-19) mainly driven by: o Acquisitions in ESV portfolio (mainly Contingent labour) o Increased investment in prod
Slide 40: Group Capex of A$62m with majority in Product & Tech
Group Capex of A$62m with majority of investment in Product & Tech SEEK Group Capex Key Insights Product & Tech: • AP&A capex of cA$45m mainly relating to: o Pricing and contract changes in ANZ (refer slide 16 for detail) o Smarter search technology, recommendations & notifications, mobile app enhan
Slide 41: AP&A - Key Operating Metrics
AP&A - Key Operating Metrics SEEK ANZ SEEK Asia Brasil (Catho) OCC Jora1 Visits (m)2 H1 20 monthly average 35m+ c46m c7m c18m c14m Job ads (#)3 H1 20 monthly average c175k c240k c150k c90k c7m Hirers (#)4 H1 20 monthly average c36k c42k c6k c8k n/a Profiles (m)5 10m+ 20m+ 8m+ c6m n/a As at 31 Dec 20
Slide 42: Zhaopin – Key Operating Metrics
Zhaopin – Key Operating Metrics No. of Completed Resumes (m) – as of period end Unique Online Customers (‘000) Average Daily Unique Visitors (m) Average Revenue per Online Customer (RMB) 41
Slide 43: Disclaimer
Disclaimer The material in this presentation has been prepared by SEEK Limited ABN 46 080 075 314 ("SEEK") and is general background information about SEEK’s activities current as at the date of this presentation. The information is given in summary form and does not purport to be complete. In parti